Tax & Trust Planning

Business owner

“The only two certainties in life are death and taxes”
Appropriate tax planning can, however, generate tax savings and it is worth considering this in respect of capital gains tax, income tax and inheritance tax.

Click on the headings below for more information:

Capital Gains Tax
Capital Gains Tax is a tax levied on profits made from the sale of assets by individuals. Some assets (e g. a person’s main residence or car) are exempt from this tax and there is also an annual exemption allowance.

The following points, whilst not exhaustive, may assist you in your tax planning.

  • Confirm that you have utilised the annual allowance.  Transfers between husband and wife can maximise the use of this allowance, as can crystallising any gains on investments.
  • Check that any family trusts have used their annual allowance.
  • If the gains, in excess of the annual exemption have already arisen, consider crystallising any losses on investments to set against the gains.
  • Where assets have become of negligible value, a claim should be made in order to establish a capital loss.
Income Tax
The following points, whilst not exhaustive, may assist you in your tax planning.

  • You can invest up to a specific amount per year (as determined annually by the Government) in an Individual Savings Account (ISA) which protects your chosen investments from income tax and capital gains tax.
  • Pension contributions and additional voluntary contribution payments for the current year and the previous six years if there is unused relief.
  • Consider tax-free exempt National Savings or Friendly Society investments.
  • The transfer of income producing assets between husband and wife may assist in using up the transferee’s starting and/or basic rate bands and is particularly useful if the transferor is liable at the higher rate on such income.
Inheritance Tax
Inheritance Tax is a tax payable on the death of an individual, calculated on the value of the individual’s estate at death and on certain lifetime gifts made in the seven years prior to death. Certain exemptions and allowances apply to this tax liability.

The following points, whilst not exhaustive, may assist you in your tax planning.

  • Have you given away your annual exemption (which can be carried forward for one tax year)?
  • If the marriage of a child or grandchild is anticipated in the coming year, then steps can be taken to take advantage of the marriage gift exemption.
  • Exempt gifts can be made in each tax year up to a specified limit (as determined by the Government).
  • Do you have any unutilised income, which would enable you to qualify for a gift exemption under the “normal expenditure” out of income rules?
  • Larger gifts, which qualify as “potentially exempt transfers” that are exempt after survival of 7 years, should be utilised.

For further information about Tax & Trust Planning or advice, please contact us.


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